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When buying a Vancouver condo or townhome, many people try to save 20% down, in order to avoid the insurance premiums you are required ot pay - in case of default. But with the real estate prices rising, can you save faster than the prices are going up? Or should you buy with less than 20% down?

With a down payment of less than 10 per cent (5 per cent is the minimum), the cost of mortgage insurance rose in June to 3.6 per cent of the purchase price from 3.15 per cent. Larger down payments short of 20 per cent were unaffected and range from 2.4 per cent down to 1.8 per cent

If prices are rising at 3-5% per annum , that will increase your downpayment required and perhaps you will be shut out of the market alltogether.

Can you save faster than the prices or rising, or should you buy with less than 20% down and pay the default insurance?

Ask your bank to crunch some numbers for you, or use a mortgage calulator

Sept'15

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